Organic Trade Ass'n v. Boggs

• Decision Date: 30 September 2010
• Docket Number: Nos. 09-3515, 09-3526.,s. 09-3515, 09-3526.
• Citation: 622 F.3d 628
• Parties: INTERNATIONAL DAIRY FOODS ASSOCIATION (09-3515); Organic Trade Association (09-3526), Plaintiffs-Appellants, v. Robert J. BOGGS, in his official capacity as Ohio Director of Agriculture, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

622 F.3d 628

INTERNATIONAL DAIRY FOODS ASSOCIATION (09-3515); Organic Trade Association (09-3526), Plaintiffs-Appellants,

v.Robert J. BOGGS, in his official capacity as Ohio Director of Agriculture, Defendant-Appellee.

Nos. 09-3515, 09-3526.

United States Court of Appeals,Sixth Circuit.

Argued: June 10, 2010.

Decided and Filed: Sept. 30, 2010.

COPYRIGHT MATERIAL OMITTED.

ARGUED: Charles M. English, Jr., Ober, Kaler, Grimes & Shriver, Washington, D.C., Randall J. Sunshine, Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor LLP, Los Angeles, California, for Appellants. David M. Lieberman, Office of the Ohio Attorney General, Columbus, Ohio, for Appellee. ON BRIEF: Charles M. English, Jr., Wendy Yoviene, Ober, Kaler, Grimes & Shriver, Washington, D.C., Randall J. Sunshine, Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor LLP, Los Angeles, California, for Appellants. David M. Lieberman, Benjamin C. Mizer, Stephen P. Carney, William J. Cole, James Patterson, Office of the Ohio Attorney General, Columbus, Ohio, for Appellee. Gregory R. flax, Baker & Hostetler LLP, Columbus, Ohio, Paige Tomaselli, The Center for Food Safety, San Francisco, California, for Amici Curiae.

Before: GILMAN and WHITE, Circuit Judges; THAPAR, District Judge. ^*

OPINION

RONALD LEE GILMAN, Circuit Judge.

In response to a number of dairy processors advertising their nonuse of artificial hormones in the production of milk, the Ohio Department of Agriculture (ODA) adopted a regulation designed to curb the allegedly misleading labeling of dairy products. The regulation prohibits dairy processors from making claims about the absence of artificial hormones in their milk products (composition claims), and it also requires them to include a disclaimer when making such claims about their production processes. Two separate dairy-processor trade organizations filed suit, asserting that the regulation violates their First Amendment rights and the dormant Commerce Clause.

The district court granted summary judgment in favor of the state of Ohio on all but one of these claims. Based on this ruling, the court also denied the dairy processors' motion for a preliminary injunction. The processors then filed an interlocutory appeal with regard to both orders. For the following reasons, we REVERSE the judgment of the district court to the extent that it upheld the regulation's prophylactic ban on composition claims and its prohibition on the use of an asterisk for required disclosures to accompany production claims, AFFIRM the remainder of the judgment, and REMAND the case to the district court for further proceedings consistent with this opinion.

I. BACKGROUND

A. Factual history

This case concerns the labeling of milk products to reflect the nonuse of artificial hormones by members of two dairy-processor trade organizations, the International Dairy Foods Association (IDFA) and the Organic Trade Association (OTA). The IDFA is a trade organization whose collective membership consists of an estimated 85 percent of the milk, cultured-products, cheese, and frozen-desserts producers in the United States. In contrast, OTA's members span the entire organic industry, including dairy production. Several OTA members are certified organic dairy processors that must comply with the Organic Foods Production Act (OFPA), 7 U.S.C. § 6501 et seq., which forbids the use of antibiotics, artificial hormones, and pesticides in food production. (The IDFA and the OTA are hereinafter collectively referred to as “the Processors.”)

At issue in this case is a genetically engineered hormone called recombinant bovine somatotropin (rbST), also known as recombinant bovine growth hormone (rbGH). The substance is given to lactating cows to increase their milk production. As used, rbST combines with the naturally occurring bovine somatotropin (bST) to increase dairy cows' milk production by up to 10 percent over cows not given the artificial hormone.

In 1993, the Food and Drug Administration (FDA) approved the use of rbST in cows, concluding that the artificial hormone “is safe and effective for dairy cows, that milk from rbST-treated cows is safe for human consumption, and that production and use of the product do not have a significant impact on the environment.” Interim Guidance on the Voluntary Labeling of Milk and Milk Products from Cows that Have Not Been Treated with Recombinant Bovine Somatotropin, 59 Fed.Reg. 6279, 6279-80 (Feb. 10, 1994); see also 58 Fed.Reg. 59946 (Nov. 12, 1993) (approving the use of rbST). The agency further “found that there was no significant difference between milk from treated and untreated cows.” Id. at 6280. Recognizing that some food companies might wish to inform consumers that they do not use milk from cows receiving rbST, the FDA determined that such companies could voluntarily label their products as such, provided that “any statements made are truthful and not misleading.” Id.

In response to requests from several states for further guidance on this issue, the FDA in 1994 published an Interim Guidance regarding the labeling of milk and milk products from cows not treated with rbST. The Guidance addressed two types of claims: (1) “composition claims,” which refer to the final composition of the milk or milk product ( e.g., “rbST free”), and (2) “production claims,” which refer to the manner in which the product is produced ( e.g., “from cows not treated with rbST”). With regard to composition claims, the FDA strongly discouraged their use. It concluded that the term “bST-free” would be false under any circumstances, given that bST is naturally present in milk. 59 Fed.Reg. at 6280. The FDA next addressed the claim “rbST free,” noting that it was “concerned that the term ... may imply a compositional difference between milk from treated and untreated cows rather than a difference in the way the milk is produced.” Id.

Instead, the agency encouraged dairy processors to use production claims such as “from cows not treated with rbST.” But it cautioned that even these claims have “the potential to be misunderstood by consumers” because they “may imply that milk from untreated cows is safer or of higher quality than milk from treated cows,” an implication that would be “false and misleading.” Id. The FDA therefore suggested that processors place production claims “in a proper context,” such as by pairing a production claim with the statement that “[n]o significant difference has been shown between milk derived from rbST-treated and non-rbST-treated cows,” or “by conveying the firm's reasons (other than safety or quality) for choosing not to use milk from cows treated with rbST.” Id.

Bowing to “the traditional role of the States in overseeing milk production,” the FDA clarified that its Guidance was a nonbinding document intended to give states assistance in formulating their own labeling laws. Id. The FDA also recommended that states require food companies to maintain records substantiating their claims and to make those records available for inspection. Id.

In the 14 years since the FDA issued its Guidance, consumer demand for dairy products made with milk from non-rbST-treated cows has increased. Many dairy processors, including those belonging to both the IDFA and the OTA, no longer accept milk from dairy farmers that comes from cows treated with rbST. Some IDFA processors, for example, have entered into agreements with milk suppliers to ensure that the milk received is from untreated cows, and the processors label their products to reflect this fact. And OTA members who label their products as “organic” are specifically precluded by the OFPA from using milk from cows treated with rbST or any other artificial hormone.

Several of these Processors advertised their nonuse of rbST on dairy products that they sold in Ohio. In response, Ohio Governor Ted Strickland issued an executive order in February 2008 that directed the ODA to “define what constitutes false and misleading labels on milk and milk products.” Ohio Governor Executive Order 2008-03S (Feb. 7, 2008). He further ordered the agency to require dairy producers claiming that they do not use rbST to submit supporting documentation and to create labels containing representations consistent with the FDA's rbST findings.

The ODA then issued a proposed Rule restricting the types of claims that dairy processors could make about milk and milk products. To gauge public support for these labeling restrictions, the ODA solicited comments about the proposed Rule and held two public hearings. Less than 70 of the 2,700 emails and letters sent to the ODA during this time period were in favor of the proposed Rule, according to estimates made by the Processors.

ODA Director Robert Boggs nevertheless adopted the Rule in May 2008. In relevant part, the final Rule states that

(A) Pursuant to sections 917.05 and 3715.60 of the Revised Code, dairy products will be deemed to be misbranded if they contain a statement which is false or misleading.

(B) A dairy label which contains a production claim that “this milk is from cows not supplemented with rbST” (or a substantially equivalent claim) may be considered misleading on the basis of such language, unless:

(1) The labeling entity has verified that the claim is accurate, and proper documents, including, but not limited to, producer signed affidavits, farm weight tickets and plant audit trails, to support the claim, are made readily available to ODA for inspection; and

(2) The label contains, in the same label panel, in exactly the same font, style, case, and color and at least half the size (but no smaller than seven point font) as the foregoing representation, the following contiguous additional statement (or a substantially equivalent statement): “The FDA has determined that no significant difference has been shown between milk derived from rbST-supplemented and non-rbST-supplemented cows.”

(C) Making claims regarding the...